Some companies are preparing to apply for the program as soon as possible because of concerns that the funds will run out before 2014.

H.D. Palmer, a spokesperson for the California Department of Finance, said the state plans to be one of the first employers to apply for the program. California's finance department has 170,000 retirees and dependents who could be eligible for the program.

HHS has not announced when it will release final application forms.

HHS Distribution of Funds

Jay Angoff -- director of HHS' Office of Consumer Information and Insurance Oversight -- said the distribution of the early retiree health funds will not be based on when employers turn in their applications. Angoff said the department would allocate money gradually as the companies submit claims for their retirees' health care costs.

Angoff said the agency had reason to expect the $5 billion fund to run out.

Influence of Large Employers

The early retiree reinsurance program demonstrates how employers shaped the health reform law, according to the Journal. Earlier versions of the legislation permitted only retirees to access the funds and barred employers from using the money to offset health costs.

However, a coalition of large employers persuaded House and Senate Democrats to remove the restriction on employers. The group argued that the original language would not encourage employers to maintain coverage or provide enough incentive for early retirees to apply for the funds (Adamy, Wall Street Journal, 6/16).
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